DOE Investories Creating Moves (USO, VLO)

The Department of Energy is out with its weekly data on crude oil stocks in reserve and the other metrics which normally follow it.  Crude Oil stocks turned in a gain of +3.558 million barrels rather than a gain of about 700,000 barrels expected by Dow Jones.  We were only looking for a build (gain) of about 1 million barrels.  The crude oil inventory now stands at 334.767 million barrels.

The United States Oil Fund (NYSE: USO) is now down 1% at $37.72 after the news.  Valero Energy Corporation (NYSE: VLO) is down only 0.1% at $24.16 after the news on the refining side and that has actually ticked up since the DOE data was released.

Gasoline stocks fell while crude stocks gained.  The reading in gasoline fell by -390,000 barrels down to 227.13 million barrels.  Dow Jones was expecting a build of +1.4 million and we were looking for about a gain of 1 million or so in gasoline inventories.

The refining capacity may be skewed due to one refining insolvency and due to many other factors, but U.S. refining capacity was down to 82.2% from 83.7% in the prior week.  This is under the 85% threshold for what is considered active and we were hoping for a reading of 83% or so.

Distillate Stocks fell by -2.456 million barrels to 145.545 million barrels in total reserves; the drop is wider than the -500,000 expected by Dow Jones.  We do not make projections in distillates.

JON C. OGG